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October 8, 2010

We are writing to set the record straight on the efforts mortgage servicers are making to assist at-risk homeowners, as well as to address the issues that are being raised about the processing of documents for mortgages that are in foreclosure. Foreclosure Document Reviews As we have said consistently, foreclosure helps no one, and it is the last thing our mortgage servicing companies want to have happen. That is why our members work hard every day with their customers who are behind on their mortgage to try to find a solution that avoids a foreclosure. This effort has produced dramatic positive results for homeowners. Mortgage servicers have completed 1.3 million loan modifications for homeowners thus far in 2010 and more than 3.7 million since 2007. Unfortunately, there are circumstances when a modification or other potential solution such as a short sale is not possible and foreclosure proceedings must be undertaken. As has always been the case, no change in the terms of the loan will help a homeowner if they don’t have adequate income to make even greatly reduced monthly payments, or if they have no desire to remain in the home. If that is the case, a foreclosure must be pursued by the servicer. We want to assure you that foreclosure is not initiated by servicers until many months of delinquent payments, after repeated attempts to work with the homeowner, and only when all other foreclosure prevention efforts have failed. In several states, some mortgage servicers have put final foreclosure sales on hold while they review their document procedures. It is important to note, however, that these are document process reviews; in almost all cases there are no factual disputes about whether the mortgage is delinquent, the amount of the arrears, or whether foreclosure is proper. Indeed, a substantial percentage of foreclosures are uncontested by borrowers. In the overwhelming majority of cases, we believe the facts presented to the courts in foreclosure proceedings about the debt amounts and delinquencies have been accurate. Servicers should be permitted to complete the review of their document processes that they have already begun. Calls for a blanket national moratorium on all foreclosures are a bad idea and would cause significant harm to communities at risk, the unstable housing market and the fragile economy. A foreclosure moratorium would not change the ultimate outcome for borrowers impacted by this situation.

Distressed Homeowners Are Being Assisted The foreclosure document and affidavit reviews servicers are conducting are only a part of the on-going efforts being made to help homeowners avoid foreclosure and stay in their homes. Servicers are also continuing to work to assist thousands of homeowners everyday who are behind on their mortgage payments. These are the facts: • • • • • • Mortgage servicers completed 149,000* loan modifications for homeowners in August 2010, including 116,000 proprietary loan modifications and 33,000 Home Affordable Modifications (HAMP.) [*HOPE NOW Alliance October Data report] 91% of all proprietary loan modifications in August reduced homeowners’ monthly payments so that the modifications are affordable and sustainable. Through August, mortgage servicers completed 1.3 million loan modifications in 2010 and almost 3.7 million since 2007. There have been 775,000 completed foreclosure sales through August 2010, compared to 1.3 million loan modifications through August. 2010 Short sales and deeds-in-lieu are being offered as a dignified alternative to foreclosure for homeowners who have exhausted all their foreclosure prevention options and cannot maintain their mortgage. Servicers continue to contact and assist at-risk homeowners in a wide variety of ways. Companies have individual customer assistance centers and participate in face to face outreach events across the nation individually and sponsored by Making Home Affordable and the HOPE NOW Alliance. More than 77,000 homeowners have received assistance at 87 HOPE NOW face-to-face events held across the country since 2008. Homeowners can reach a non-profit counselor at a HUD-Certified counseling agency 24 hours a day, 7 days a week through the 888-995-HOPE Homeowners’ HOPE hotline operated by the Homeownership Preservation Foundation. Servicers and Counselors have worked to enhance electronic submission of documents for loan modifications through the new HOPE LoanPort system.

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Mortgage servicers continue to help thousands of consumers avoid foreclosure every day. Real progress is being made. The foreclosure document and affidavit review process that servicers are undertaking will clarify the situation significantly.

Attached is a resource sheet for Congressional staff to assist your constituents. We will continue to work with all Members of Congress on mortgage loan inquiries that you receive from your constituents. Sincerely,

Steve Bartlett President and CEO The Financial Services Roundtable

John H. Dalton President Housing Policy Council

John A. Courson President and Chief Executive Officer Mortgage Bankers Association

Attachment Resources for Assisting At-Risk Homeowners

Resources for Assisting At-Risk Homeowners:
Agency Homeowners HOPE Hotline:
(Homeownership Preservation Foundation)

Telephone 888-995-HOPE 202-589-1920 866-939-4469 800-569-4287

Website www.995hope.org www.hopenow.com www.makinghomeaffordable.gov www.hud.gov www.dol.gov www.ftc.gov www.fanniemae.com www.freddiemac.com www.nw.org www.fhfa.gov www.occ.gov

HOPE NOW Alliance Making Home Affordable Program:
(US Department of Treasury)

US Department of Housing:

US Department of Labor Unemployment Division: 877-872-5627 FTC Foreclosure Rescue Scams: Fannie Mae: Freddie Mac: NeighborWorks America Federal Housing Finance Agency: Office of Comptroller of the Currency: 877-382-4357 800-732-6643 703-903-3933 202-220-2300 202-414-3800 800-613-6743